Forfeiture accounts have become a topic of growing interest in Employee Retirement Income Security Act (ERISA) litigation, as evidenced by a series of new cases being brought forth. In these suits, retirement plan fiduciaries are accused of breaching their fiduciary duties to plan participants. One of these recent cases includes McManus v. Clorox Co., N.D Cal. No. 4:23-cv-05325.
Taking aim at forfeiture accounts, plaintiffs argue that they are part of an ongoing series of transgressions by retirement plan fiduciaries. These litigations represent a potential growth trend in ERISA law, with forfeiture accounts being proposed as new triggers for dispute.
A key point of contention in these cases revolves around the apparent misuse of forfeiture accounts. These accounts are generally meant to house non-vested employer contributions when an employee leaves a company before they are entitled to the full value of those contributions. The question at hand seems to be how retirement plan fiduciaries are managing these forfeiture accounts and whether there has been a breach of responsibility.
Given these developments, it would be wise for corporations, law firms, and other stakeholders in ERISA procedures to stay aware of this trend and re-evaluate their own practices surrounding forfeiture accounts. Understanding this emerging theme in litigation may prove critical in avoiding legal pitfalls or providing relevant advice for clients.
Review the detailed outlook of this emerging area in litigation by following through to the post at JD Supra, penned by Bricker Graydon LLP.